Apple’s Trade Embargo. Is it “racial” discrimination?

I generally shy away from trendy stories of the day. They are covered elsewhere and the wonks are predictable. Columnists and bloggers add spin of their own camp, either liberal or conservative. My take on these stories would be similarly predictable. That’s why I hold out for something with meat on the bone—something to which I can lend a Wild Duck insight. After all, I want the ‘wild’ part to mean something.

But today, a story making news misses a very critical fact. One that changes the conclusion. Let me explain…

Sahar Sabet is a typical America teen. Although she comes from Iran, she is a US citizen. She looks, speaks, dresses and grooms like a typical, white, suburban girl. Of course, even if she looked, dressed or behaved as a foreigner or an immigrant (an absurd determination for a country filled with immigrants), you would expect that in a shopping mall, she would be treated like any other shopper.

This weekend, Sahar and her uncle browsed an Apple store at North Pointe Mall in Alpharetta Georgia. Choosing an iPad, the salesman overheard the couple speaking in Farsi. When Sahar explained that it is the language of Iran–also known as Persia–the salesman prohibited the sale, explaining “Our countries do not have good relations”. He stated that Apple enforces a trade embargo against Iran and several other countries and showed the would be customers a written Apple policy which, itself, cites US trade restrictions.

For consumers of mainstream media, the Apple salesman seemed racist or, at the very least, ignorant. What do trade relations have to do with a retail sale? And how could he miss the fact that Sahar is a citizen of the same county as himself and the late Steve Jobs?

Sitting outside her home and talking to a television reporter, Sahar explains that she left the store in tears. Zack Jafarzadeh had the same experience at the nearby Perimeter Mall. Perhaps more bizarre, he is born in Virginia of Iranian ancestry. In the video clip below, he states that the policy smacks of ethnic profiling. Of course, the Council on American-Islamic Relations (CAIR) protested the incident immediately.*

You will find a great many news stories about Sahar’s trip to the mall this week. But a few stories, like this firsthand account from an Atlanta television station include a fact that is critical and yet overlooked in the commentary. It makes all the difference in the world:

“The iPad was to be a gift for her cousin who lives in Iran.”

Wohah!…That changes everything! The US trade embargo law specifically mandates that the store shall not sell embargoed technology if they know that the product will be exported, transferred or re-exported to Iran. It’s not clear if the salesman was made aware of the intention to export the iPad, or if he was a closet racist, or perhaps he was expressing his own post-911 anxiety. But either way, this is valid trade law, and Apple would get into a lot of trouble if they violate this law.

Zack was born in Virginia. Both he and Sahar are as American as apple pie. So naturally, news reports slam the Apple salesman for profiling immigrants. They also question the role of a private company in enforcing a federal trade embargo at the point of sale. But again, they miss the point. To illustrate, consider this bump in the success story of Digital Equipment Corporation, the Massachusetts minicomputer manufacturer that rivaled IBM in the 1970s and 80s…

In the early 1980s, Digital’s flagship minicomputer, the VAX 780, had the distinction of being on the original list of embargo technology. Naturally, during the Cold War, sales of fast computers to the Soviet Union were restricted.

During the Cold War, selling fast computers to Soviets was illegal, even if transferred through an intermediary or neutral country.

Sellers of large, expensive computers generally know their buyers. Even if a deal is not initiated by the sales team, sellers defend price and competitive position. Engineers at buyer and builder talk nuts & bolts. This was no exception. But because Digital could not openly sell to Russians, they transferred the machine to an American shill organization, because an intermediary is more likely to fly under the radar while transferring the computer to the Soviets.

Bad move, Digital! The deal was discovered and the company faced an inquiry and stiff penalties. Most importantly, they were disgraced in the press.

Regarding the Apple iPad, one could question the law as it applies to a popular consumer item, one that is available in many other countries. But the law and its clear focus on export awareness by sellers restricted lends a different spin to the Apple salesman’s actions.

Just as with Miss Sabet, Mr. Jafarzadeh was purchasing the iPad for an Iranian friend who accompanied him to the store. He was in the United States on a student visa. If this fact were apparent to the salesman, then he would be compelled to deny the sale.

Incidentally, Sabet’s mother was able to purchase the iPad on a subsequent visit and an Apple spokesperson told reporters that it could also be purchased online to circumvent the policy (or at least the enforcement of the policy). While this may be the case, it might still violate US trade law. The law is clear. Certain products, services, technology and components are prohibited from being sold, directly or indirectly, if they are slated to be exported, transferred or re-exported to countries on a technology embargo list that includes Iran, Cuba, North Korea and Syria.

* Despite the warm-fuzzy title, CAIR is a widely acknowledged front for terrorists, still operating, openly, within the United States. The group’s actions speak volumes about their agenda, posing as an NGO of tolerance and cultural bridges while seeking to use our western tradition of inclusion, tolerance and accommodation to make Islamic Sharia Law palatable in America. But I digress. We can cover that story in another post.